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1. How much interest will Tk. 2000 earn in one year at an annual rate of 8% if the interest is compounded every six months?
- A. Tk. 160
- B. Tk. 160
- C. Tk. 160
- D. Tk. 160
Answer: Option B
Explanation:
Here, Principal, P = 2000 TK, Rate of interest, r = 8%, Repetition of time period(1 year), t = 1 & Interest compounded (n = 2) times within a year(every six months).
Compound interest, I = P(1 + r/n)nt - P = 2000(1 + (8/100)/2)(2x1) - 2000 = 2000(208/200)2 - 2000 = 163.2 TK
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